California energy regulators are considering a new approach to electrifying transportation, starting with an initial $1 billion electric-vehicle charging rebate program intended to help accommodate a surge in EV purchases this decade.
A proposed decision from California Public Utilities Commission member Clifford Rechtschaffen, released Oct. 14, would offer rebates for behind-the-meter EV infrastructure investments at commercial, industrial and residential sites over a five-year period starting in 2025. A second phase would begin in 2030, with budget and other details to be determined down the road.
The program, funded by investor-owned utility ratepayers and administered by a third party, aims to support California's ambitious bid to neutralize the state's greenhouse gas emissions before midcentury. Part of that push is a mandate to phase out new sales of traditional gasoline-powered light-duty vehicles by 2035 while moving toward higher shares of low- to zero-emission medium- and heavy-duty vehicles.
The CPUC's Public Advocates Office recommended capping the budget in the first phase of the program to $100 million in the launch year and determining the budgets for subsequent years based on market needs and program performance. Other parties, however, including Edison International utility subsidiary Southern California Edison Co., or SCE, said $1 billion was insufficient to meet the needs for EV charging flagged by the California Energy Commission.
In the view of CPUC staff, the program's initial $1 billion budget "appropriately balances" the benefits of increased access to EV charging, the costs of continued ratepayer investments and other sources of state and federal funding for transportation electrification, according to the proposed decision.
The proposal reflects a desire to transition from "the current piecemeal application and approval processes" to a "more nimble and focused funding cycle approach," it added. Under the proposal, 70% of funds would be reserved for medium- and heavy-duty charging and 30% of funds would go toward light-duty charging at or near multi-unit dwellings.
At least 65% of the total budget is reserved for underserved communities.
November vote possible
Funding would come from ratepayers of the state's big three investor-owned utilities — SCE, PG&E Corp. operating arm Pacific Gas and Electric Co. and Sempra subsidiary San Diego Gas & Electric Co. The proposed decision also directs utilities Bear Valley Electric Service Inc. and PacifiCorp, an affiliate of Berkshire Hathaway Energy, to participate.
If the program is approved, utilities could access 60% of the budget within the first three years. At that point, regulators will assess the program's progress. "The Commission may modify or terminate the program if ratepayers are unduly burdened," the filing said. "This provides flexibility to determine if the full $1 billion is reasonable over the five-year period."
Regulators could vote on the proposed decision as early as the CPUC's Nov. 17 business meeting.
The proposal builds on approximately $1.8 billion in funds for EV infrastructure initiatives already authorized by the CPUC. Of that, roughly $1.48 billion remains to be spent, providing ample runway until the new program starts, according to the proposed decision. California also has access to billions of dollars of state and federal funds for EVs and EV charging, regulators noted.
A 2021 report from the Energy Commission estimated the need for up to 1.2 million EV chargers to support an estimated eight million light-duty electric cars and trucks by 2030, and an additional 157,000 chargers for medium- and heavy-duty EVs.
California currently has just 79,023 public and private shared chargers for its 1.2 million light-duty EVs and fewer than 2,000 medium- and heavy-duty EVs, according to Energy Commission data.
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